Menthaoil April contract dropped Rs 89.8 and settled at Rs 2154.8 on profit booking by the traders on higher sowing from the producing regions amid poor spot demand. According to trade sources, acreage under mentha crop is likely to increase by 1.5 times this year as many new areas of MP, Punjab and Bihar are entering in mentha cultivation. Expected rise in sowing activities is likely to prevent rates from moving up much in the short term as new crop arrivals are expected high from end-May onwards. Expectations of higher sowing activities this year put pressure on the markets even as low stocks and lower arrivals were reported in the mandis. The next crop is expected to arrive in June and till then arrivals are expected to remain weak in the mandis. Good demand from the International markets and the domestic pharmaceutical Industries was noted. Low production and lower stock levels too supported the market sentiments. On 23th March total stock of mentha oil at MCX-monitored warehouses at Chandausi was 1, 85, 590 kg of which 1, 55, 383 kg was physical stock and demat stock was 30, 206 kg. At Barabanki, the total stock was 10, 60, 042 kg of which, physical stock accounted for 8, 51, 594 and demat stock was 2,08,447kg. The contract made intraday low of Rs 2154.8 a kg and high of Rs 2270 a kg with the volume of 3036 and total open interest for the same contact was at 3246.Now support for the menthol is seen at 2116.4 and below could see a test of 2078. Resistance is now likely to be seen at 2231.6, a move above could see prices testing 2308.4.

Trading Ideas:

Mentha oil trading range for the day is 2078-2308.4.

Menthaoil spot is at 2340/-.Spot market is down by Rs.20/-.

Mentha oil ended lower on profit booking on higher sowing from the producing regions amid poor spot demand

Acreage under mentha crop is likely to increase by 1.5 times this year as many new areas are entering in cultivation

On 23th March total stock of mentha oil at MCX warehouses at Chandausi was 1, 85, 590 kg